The stock has gotten three upgrades this morning, from Piper Jaffray, RBC Capital, and Macquarie.

RBC’s Mark Mahaney, raising his rating to Outperform from Sector Perform, and setting an $88 price target, writing, ” We have stated for some time that we would be constructive on YELP in the event of a pullback. A two-month 40% correction classifies as a pullback. Further, at ~8X P/S and ~30X EV/EBITDA, we view YELP valuation as more reasonable.”

There’s plenty to contemplate in M&A world this morning, including Bloomberg’s report last nightSprint (S) is preparing funding to buy T-Mobile US (TMUS), which has pushed up shares of T-Mobile by $2.61, or almost 9%, to $31.90, this morning, and pushed up Sprint by 38 cents, or 4.6%, ago $8.88.

BernsteinResearch’s Robin Bienenstock writes this morning it’s the perfect time for T-Mobile’s owner, Deutsche Telekom (DT), to sell, given that the merger with MetroPCS last year, and the resultant price war “was perfectly timed for the peaking of smartphone penetration, and the lower income deciles that are now the majority of new to data customers.”

However, ”Long term however, TMUS’ strategy is not sustainable and they and their proprietors know it.”

Re/Code’s Ina Friedthis morning writes, however, that “no deal is imminent,” citing a single unnamed source.

No matter, there was another pursuit ready at hand: The Wall Street Journal’s Shalini Ramachandran and Thomas Grytathis morning report that AT&T (T) has approached DirecTV (DTV) “about a possible acquisition of the satellite-TV firm,” citing multiple unnamed sources.

That has pushed up shares of DirecTV to $4.85, or 6.3%, at $82.46, while AT&T shares are up two cents at $35.72.

Wunderlich’s Matthew Harrigan, who has a Buy rating on DTV stock, and a $93 price target, writes that such a deal would make sense because it would accelerate AT&T’s home video push, writing “A deal with DirecTV would offer a premium demographic national video solution that supports first to market 4K TV capabilities while allowing AT&T’s U-verse plant to be entirely dedicated to broadband.”

But Jennifer Fritzsche with Wells Fargo, who has an Outperform rating on T shares, writes this morning “What do we think? Who knows! In some way this is a classic T move if true…make everyone look one way (VOD / DISH?) and be headed in a total opposite direction.”

Speaking of T-Mobile, the company this morning reported Q1 revenue of $6.88 billion, missing consensus of $6.92 billion, and Ebtida of $1.1 billion, missing consensus of $1.2 billion, with the company saying it incurred higher expenses as it pursued its “Uncarrier 4.0” program of luring subscribers with offers to pay off their old wireless bill or subsidize handset costs. T-Mobile added 1.3 million branded post-paid subscribers, and said its churn level fell 40 basis points from the year-earlier quarter to 1.5%.

T-Mobile cut its year outlook for Ebitda to a range of $5.6 billion to $5.8 billion from a prior range of $5.7 billion to 6 billion.

Citigroup’s Michael Rollins, who has a Neutral rating on the stock, and a $33.50 price target, writes that “T-Mobile has emerged as a tougher competitor, and performance could continue at a higher level than our revenue estimates during 2014 given the combination of better unit volume and modestly better ARPU within the postpaid segment,” but that “We still remain concerned on the cost of growth.”

Shares of Western Digital (WDC) are down $4.52, or 5.2%, at $83.56, following yesterday afternoon’s report of earnings per share a bit better than expected, but a projection of revenue and earnings this quarter below consensus.

There are not ratings changes this morning, that I can see, but a number of defenders of the stock have come out, including Morgan Stanley’s Katy Huberty, who reiterates an Overweight rating on the shares, while cutting her price target to $100 from $106, writing that investors should look ahead to “catalysts,” including the rebound in cloud computing purchases later this year, and the expected approval by Chinese regulators of the company’s integration of Hitachi’s storage products group, which is being operated separately at the moment.

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There are 2 comments

MAY 1, 2014 11:48 A.M.

Anonymous wrote:

Take a look at Emulex (ELX) -- down 26% on weak results and poor guidance.

MAY 1, 2014 12:25 P.M.

Jonny Ringo wrote:

T Mobile's strategy only works for a period. As a national network their network is limited and pathetic. Its parent company, Deutsche Telecom, has unequivocally manifested that they have no intention of pouring money into their network to make them more competitive, which doesn't say much for the company's future. Their 'un-carrier' approach can easily have a boomerang effect since there is no contract involved, hence once the consumer realizes that TMUS's network is prone to limited coverage and capacity and the competition releases their new plans that can easily emulate their 'un-carrier' plans, such as Sprint's 'Framily' plan, we will see a mass exodus from T-Mobile.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.